Succeeding amid accelerating dynamicism.
(www.capitalism2.org)

Monday, November 24, 2008

Vacation

As you've all noticed, I haven't been contributing much to the blog lately. I'm going on vacation next week, and have been busy getting everything done before the holidays basically shuts everything down.

I have a ton of ideas for new articles on old subjects and some new topics. If any of you want to pen an article in my absence, send me an email before Saturday (you can find my email on the blog).

10 Comments

Mission Accomplished. Another successful recharging of my will to live, thanks to Maui. I'll be updating the blog soon.

On my trip I got through another of Taleb's books, which I read right after Schiff's most recent book. I have to say, I'm very decidedly in the Taleb-thinking camp. He very clearly describes exactly what's been bugging me about Schiff et. al. and their particular brand of predictions. Namely, their predictions aren't really any better than those who have been guilty of predicting the inverse all along (the proverbial cheerleaders). They're all missing the point.

Schiff's predictions are based upon a naive set of assumptions that a particular brand of linearity and causality exists in things economic and financial. In fact, time will ultimately ravage his predictions just as badly as those of the recently discredited "buy & hold" crowd. Schiff just has the current luck of timing. We're forgetting all the would-be Schiff's who've predicted the exact same thing he has over the past 30 years, all of which are now either dead or broke.

But then again, most in the business of assessing economic risks and financial fortunes are really doing nothing more than rolling dice.

BTW, how is it on the ground in Maui? I haven't seen any really great Hawaii deals yet, but French Polynesia/Cook Islands/Fiji packaged tour prices have dropped by almost 1/3 in the last two months. If the USD keeps strengthening relative to other currencies, I might be able to afford Bora Bora next fall.

Prices in Maui remained about as high as they were a year ago. The main difference I saw was almost zero Europeans, and a much larger number of Japanese and Koreans. Now, due to proximity, there have always been fewer Euro visitors to the islands, but, this seemed more exaggerated than I've seen before.

Regardless, prices are still high. But there was a _lot_ of talk on local tv & radio about the super-low occupancy rates of the big resorts. We stayed at the Grand Wailea which someone told us was at under 20% occupancy. They were giving $1K/room purchase credits to anyone willing to stay there during the "soft season", which is normally between Thanksgiving up until right before Xmas.

The real test for the resort hospitality industry will be 2009. That's where we'll start really hearing about occupancy rates and prices.

Incidentally, we may redirect to Europe for the first time in a few years for our next year's family vacation if the EUR keeps on disintegrating. More on that later...a currency cannot be expected to survive with centralized monetary policy and fragmented, uncoordinated fiscal policy. I am a EUR skeptic long-term. Another ding to Schiff's advice.

randy, i have read your price stickiness argument
(in patrick.net) in detail & i have seen it play
out precisely as you expected it to be, in the
bay area, till the recent credit crisis. now i
see a slightly different behavior from sellers,
with a lot of them accepting the reality &
cutting prices in bigger chunks. it is still
expensive but i do see cuts in the range of
50K-100K, even in nicer areas (hills, school
district etc). in not-so desirable areas where
there is a lot of foreclosures/short sales, i
am seeing sellers trying to price very
competitively with (or sometimes lower than) the
reo prices. is there a tipping point in the
sellers psychology, just like the one in stock
market? and if so, how would that affect the
price stickiness?

I ended up reading Taleb's Fooled by Randomness and enjoyed it quite a bit. It's certainly got its share of flaws and work best as criticism against the current "platonic" regime, but certainly a lot to chew over.

After that, I read Galbraith's Short History of Financial Euphoria and Lowenstein's When Genius Failed. Both are sounding very prophetic considering our collective economic pickle.

I am ueber-busy these days, thus my neglect at updating this site as regularly as I'd hoped. An entirely anecdotal, but interesting inverse correlation exists between how busy (profitably so) I am and how well the economy is doing. From the backlog and overbooking I have these days for my services, along with the now multiple offers to join up as a full-time exec, I'd say we're definitely headed into a depression.